Tag: term sheet

Sep 13 2011 by Jason

Convertible Debt Series

We’ve been overwhelmed by the support for our book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. As part of the experience of releasing the book, we’ve gotten the chance to interact with many new people interested in the venture capital and angel financing process.

The most often requested additional topic that we don’t cover extensively in our book is the use convertible debt in early stage – especially seed stage – financings. While we generally don’t use convertible debt at Foundry Group, we’ve had plenty of experiences with it over the years and strong opinions about what entrepreneurs should pay attention to when consummating a convertible debt transaction.

This series won’t be a discussion about the pros and cons about raising a traditional preferred equity round versus a convertible debt round. Plenty of discussion about this can already be found on the web about this. For a primer, take a look at articles by Jason Mendelson, our partner Seth Levine, and our friends Mark Suster and Fred Wilson.

This series will be about the terms that matter and how to best approach thinking about how them, much like we did in our Term Sheet series which went on to inspire the book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist.

We’ll be publishing posts on Tuesday and Thursday for the next few weeks so as not to compete with Fred Wilson’s awesome MBA Mondays series and Brad’s “just getting started” Finance Fridays series.

We hope you like the new series and as always, please comment freely, tell us what you think, and help us clarify stuff we don’t explain well.